Palm oil ended unchanged as speculation that a decline in crude oil prices will reduce the demand for biofuels countered optimism that food demand may increase after futures dropped to the lowest level this year.
The contract for July delivery, the most active by open interest and volume, closed at 2,301 ringgit ($757) a metric ton on the Bursa Malaysia Derivatives. Futures for June delivery ended at 2,293 ringgit yesterday, the lowest level for the most- active price since Dec. 17.
Brent crude fell below $100 a barrel for the first time since July amid signs the global economy may slow, curbing fuel demand. Growth in China slowed to 7.7 percent in the first quarter from 7.9 percent in the previous three months, government data showed yesterday. The Standard & Poor’s GSCI Index of 24 commodities fell as much as 1.8 percent to the lowest since July.
“The weaker the crude oil price, the biodiesel viability becomes less,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. “The CPO price has to decline to make it affordable again to convert into biodiesel.”
Exports from Malaysia fell 4 percent to 648,275 tons in the first 15 days of April from the same period in March, Intertek said yesterday. Shipments declined 7.2 percent to 629,990 tons in the same period, Societe Generale de Surveillance estimates.
Soybean oil for July delivery gained 0.8 percent to 48.74 cents a pound on the Chicago Board of Trade and soybeans climbed 0.7 percent to $13.6575 a bushel.
Refined palm oil for September delivery lost 0.3 percent to close at 6,148 yuan ($995) a ton on the Dalian Commodity Exchange, while soybean oil fell 0.2 percent to 7,660 yuan a ton.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at email@example.com
Source : Bloomberg